These Small Business Owners Are Owed Tariff Refunds. Will They Ever Get Them?

In the wake of the Supreme Court’s February 20, 2026, ruling that invalidated tariffs imposed under the International Emergency Economic Powers Act (IEEPA), billions in refunds are owed to U.S. importers, with small businesses hit hardest by the financial strain.[2][3] Yet, as of late February 2026, uncertainty looms large: complex refund processes, administrative hurdles, and political resistance mean many small business owners may wait years—or never see their money.[1][2][3]

The Supreme Court Ruling: A Victory That Left Questions Unanswered

The Supreme Court declared that IEEPA does not authorize presidential tariffs, striking down duties on imports from targeted countries during the Trump administration.[2][3] This decision affects billions in collected tariffs, creating an unprecedented refund scenario for U.S. Customs and Border Protection (CBP).[3] Six justices in the majority opinion focused solely on legality, offering no guidance on refunds, leaving importers, courts, and CBP to navigate uncharted territory.[3]

Small businesses, often operating on thin margins, bore the brunt. A coalition of over 800 small firms, “We Pay the Tariffs,” sent a letter post-ruling urging automatic refunds, arguing they lack resources for prolonged legal battles.[3] Importers paid these tariffs upfront, passing costs to consumers or absorbing losses—now, with the tariffs ruled illegal, refunds with interest are in order, but the path forward is murky.[1][4]

Refund Processes: A Maze for Small Businesses

CBP has standard procedures, but scaling them for billions in IEEPA refunds is daunting.[2][3] Eligibility depends on entry status: unliquidated entries (about 19.2 million as of late 2025) allow Post-Summary Corrections (PSC) via CBP’s Automated Commercial Environment (ACE) or liquidation extensions.[2] Liquidated entries require formal protests within 180 days of liquidation or lawsuits in the U.S. Court of International Trade (CIT).[2]

Trade experts warn of bottlenecks. Protests can take up to two years for review, even with accelerated requests, and the CIT has stayed new cases to manage volume.[2] Documentation is key—importers must gather entry summaries, proof of payment, and tariff details, a task easier for firms with automated systems like Avalara.[2] CBP now issues refunds electronically via Automated Clearing House (ACH) since February 6, 2026, but IEEPA specifics remain undefined.[2]

Small businesses face extra hurdles. Informal entries under $2,500 (19.8 million by December 2025) liquidate upon payment, complicating claims.[2] Legal fees for CIT suits or protests could exceed refunds for modest importers, trapping owners in limbo.[3]

Legislative Push: Bills Aim for Automatic Relief

Bipartisan frustration has spurred action. The Tariff Refund Act of 2026, backed by Senators Padilla, Wyden, Markey, Shaheen, and 19 Democrats, mandates CBP to refund all illegal tariffs with interest within 180 days, prioritizing small businesses.[1][4] It eliminates costly admin steps, requires 30-day congressional reports, coordinates with the Small Business Administration (SBA) for guidance, and addresses duty drawbacks.[1][4] Congress expresses that large firms should pass refunds to customers.[4]

In the House, Democrats Horsford and others introduced the RELIEF Act, targeting tariffs from January 1, 2025, with automatic refunds in 90 days—no applications needed.[3] These bills prioritize small entities, recognizing their vulnerability.[1][3][4]

Yet, passage is uncertain. The Trump administration has signaled it will fight refunds, and with a divided Congress, these measures may stall.[2][3] Treasury funding questions persist—does it have billions ready, plus interest?[3]

Small Business Struggles: Real-World Impacts

Consider a Midwest hardware importer: tariffs inflated costs on Chinese tools, forcing price hikes or margin cuts during inflation.[3] Now owed refunds, they juggle paperwork amid daily operations, without in-house lawyers.[3] The “We Pay the Tariffs” coalition highlights this: small firms can’t afford delays, unlike conglomerates.[3]

Trade attorney Zack Hadzismajlovic advises pre-filing protests held in abeyance to meet deadlines, but warns of processing backlogs.[3] CIT rulings from December 2025 affirm refund availability post-liquidation and grant reliquidation powers, but the Supreme Court ruling shifts dynamics.[2]

Will They Get Refunds? Outlook as of February 2026

Optimists point to CBP’s infrastructure and legislative momentum—automatic bills could deliver fast if enacted.[1][3][4] Pessimists foresee years of litigation, with the administration resisting payouts.[2][3] Importers preparing now—auditing records, automating data—stand best.[2]

For small businesses, time is money. Without swift reform, refunds risk becoming a hollow Supreme Court win. Lawmakers must act, or these owners’ patience—and solvency—will erode further. As Horsford stated, “When the government takes money without proper authority, it doesn’t get to keep it.”[3]

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Original source: NPR News – These small business owners are owed tariff refunds. Will they ever get them?